UPDATE 1-Chile factory output slides more than expected in Feb

SANTIAGO, March 31 (Reuters) - Chilean manufacturing
production fell more than expected in February, government data
showed on Monday, underlining the challenge facing President
Michelle Bachelet the same day she begins a pledged
tax-and-spend program of reforms.

Factory output fell 2.0 percent in February from
a year earlier due to lower metals and chemical production, a
much bigger drop than the 0.4 percent decline forecast by
economists in a Reuters poll.

On a seasonally-adjusted basis, it slipped 4.2 percent in
February from January.

Retail sales, a measure of private consumption, grew 5.3
percent in February versus a year earlier, "continuing the
deceleration observed in recent months," the government's INE
statistics agency said.

The data underscores a slowdown in the world's top copper
producer just as Bachelet is due to submit a wide-ranging tax
reform bill. Critics of the bill charge that it may worsen an
already cooling investment climate.

"There is a situation of decreasing consumption expectations
and a smaller workforce, with signs of adjustments in the
market, such as the central bank lowering the monetary policy
rate and lower imports of durable goods in the last three
months, which reflects lower expectations for the consumption of
these goods," the INE said.

The agency also reported that the Andean nation's jobless
rate for the December-February period remained
steady at 6.1 percent.
(Reporting by Santiago bureau; Editing by Chizu Nomiyama and
Bernadette Baum)